Pound Slumps as Hawkish Fed Fades UK Rate Cut Hopes

The British Pound declined against the US Dollar on Thursday due to a stronger greenback after the Federal Reserve held interest rates steady but signaled a cautious, hawkish stance on future policy.

The Fed's decision reinforced expectations that US rates will stay higher for longer, providing a fresh tailwind for the US Dollar against major peers, including the Pound.

Market participants are now focusing on the Bank of England's upcoming rate decision, with traders pricing in a potential shift in UK monetary policy. A dovish signal from the BoE could put additional downward pressure on Sterling.